I want to briefly touch on some collections methods and issues today. This articles assumes you've done the preemptive stuff like have a detailed, signed contract and taken a large deposit to hedge against risk.
The first step is to try and collect the money yourself with follow-up invoices, letters and an offer of a payment plan. In this stage you can often accomplish two important things: getting a personal guarantee from the business owner, and getting the business owner to sign a promissory note.
A personal guarantee allows you to sue the owner personally for the money owed and not just the business. This is important because a lot of times a business can look cash poor even while the owner is still making a tidy profit. And if the business fails, you can't require the owner to pay you unless the owner has personally guaranteed the contract. A personal guarantee may allow you to garnish the owner's wages and/or put a judgment on the owner's house. (Remember, you only get a 'judgment' if you go to court and win.)
A promissory note is a kind of contract in which the debtor promises to pay a principal amount and interest by a certain date. Again, it's best if the business owner signs the promissory note both as a representative of the business and in his or her personal capacity. You can find sample promissory notes on the web, but if you're nervous about drafting it, hire a lawyer to help you. Keep in mind that it is illegal to charge too high an interest rate, so know your state's laws before trying to charge someone 30% interest!
If your personal collection efforts aren't successful, then you can either (1) turn the account over to a collection agency; (2) take the client to small claims; (3) hire an attorney to write a collection letter for you; or (4) hire an attorney to start a lawsuit for you. These methods are not universally appropriate. Let's look at each one individually:
1. Collection Agency. You can pay a collection company (usually a certain percentage of the collected amount, plus fees) to get the money for you. Collection agencies do nothing but collections all day long, so they are experts at locating the debtor and getting them to pay up. They work with courts and credit rating companies. They are very often successful at collecting at least most of the debt, but not always. You will need to provide the collection company substantiation for the amount, such as the signed contract and a printout of the debtor's account. Collection agencies, in my opinion, are best for smallish debts. Collection agencies are also good if the debtor lives in another state. Just make sure you find a collection agency that's national in scope or in the state where the debtor is located.
2. Small Claims Court. If the debt is small enough and you live in the same area as the debtor, you can take the debtor to small claims court. There are strict limits on the dollar amount you can ask for in small claims. Regardless, I wanted to put this option in the list in the event that you have problems with smaller amounts. Also, you have to bring the small claims action where the debtor is located. Thus, this is really only an option if the debtor is local to you. Attorneys aren't allowed in small claims court.
3. Attorney Debt Collection Letter. Some debtors are really intimidated by letters from attorneys. Maybe it's the letterhead? Maybe it's because it shows how serious you are about the matter? Some attorneys will charge a nominal fee to write a threatening collection letter on your behalf. The price could range anywhere from $50 to $350. If you have a pre-existing relationship with an attorney, she may give you a better deal. Note: some debtors get nasty letters from attorneys all the time so they are not particularly moved by them. Thus, attorney-drafted collection letters don't work every time, but they do work sometimes. When they do, it's a great deal for you because it means you didn't have to pay commissions, just a one-time fee!
4. Have your attorney file a lawsuit. If the debtor doesn't respond to a collection letter from you or your attorney, you can hire an attorney to sue the debtor for you. Sometimes, unfortunately, the only way to get paid is to start a lawsuit. This is a last resort because it is expensive and uncertain. It's only worth it if you are owed a large amount, the debtor has the actual ability to pay (you can't bleed a turnip!), and you have good substantiating evidence of the debt (a promissory note would be ideal). It's also much more attractive if your contract with the debtor allows you to get attorneys fees and costs in the event of a dispute. That way, you can ask the debtor to pay your attorneys fees as well. Take a look at your contract because if it allows you to collect attorneys fees and costs, then a lawsuit is a much more attractive option. Lastly, be sure and hire an attorney who works in the state (preferably the county) where the debtor resides. Generally, you have to sue the debtor where he or she lives. Thus, you need an attorney who is licensed to practice law in that state and comfortable in those courts.
One final note about using a collection agency versus an attorney: a lot of people like collection agencies because they require minimal payment up front; you only pay omission if they collect. On the other hand, attorneys require you to pay a retainer up front.
There's no exactly right or wrong way to go about this, so just do a little research about what commission (and fees!) a collection agency would charge you, and whether your contract allows you to recover attorneys fees. You can also switch tactics. Sometimes clients would ask me to sue the debtor after a collection agency was unsuccessful collecting the money.
I'm going to end on an important piece of advice: Sometimes it's better to just let go. Never forget that we're emotional beings and often get carried away by them. Don't let your feelings of anger, guilt, and revenge drive you to pursue a debt beyond what is permitted by debtor's laws or just good financial sense. Learning to let go is also an important skill that needs to be developed over time.
I hope this post helped broaden your collections horizons and made you aware of some important collections issues. Please let me know if you have follow-up questions or concerns.
Respectfully,
Sarah
A personal guarantee allows you to sue the owner personally for the money owed and not just the business. This is important because a lot of times a business can look cash poor even while the owner is still making a tidy profit. And if the business fails, you can't require the owner to pay you unless the owner has personally guaranteed the contract. A personal guarantee may allow you to garnish the owner's wages and/or put a judgment on the owner's house. (Remember, you only get a 'judgment' if you go to court and win.)
A promissory note is a kind of contract in which the debtor promises to pay a principal amount and interest by a certain date. Again, it's best if the business owner signs the promissory note both as a representative of the business and in his or her personal capacity. You can find sample promissory notes on the web, but if you're nervous about drafting it, hire a lawyer to help you. Keep in mind that it is illegal to charge too high an interest rate, so know your state's laws before trying to charge someone 30% interest!
If your personal collection efforts aren't successful, then you can either (1) turn the account over to a collection agency; (2) take the client to small claims; (3) hire an attorney to write a collection letter for you; or (4) hire an attorney to start a lawsuit for you. These methods are not universally appropriate. Let's look at each one individually:
1. Collection Agency. You can pay a collection company (usually a certain percentage of the collected amount, plus fees) to get the money for you. Collection agencies do nothing but collections all day long, so they are experts at locating the debtor and getting them to pay up. They work with courts and credit rating companies. They are very often successful at collecting at least most of the debt, but not always. You will need to provide the collection company substantiation for the amount, such as the signed contract and a printout of the debtor's account. Collection agencies, in my opinion, are best for smallish debts. Collection agencies are also good if the debtor lives in another state. Just make sure you find a collection agency that's national in scope or in the state where the debtor is located.
2. Small Claims Court. If the debt is small enough and you live in the same area as the debtor, you can take the debtor to small claims court. There are strict limits on the dollar amount you can ask for in small claims. Regardless, I wanted to put this option in the list in the event that you have problems with smaller amounts. Also, you have to bring the small claims action where the debtor is located. Thus, this is really only an option if the debtor is local to you. Attorneys aren't allowed in small claims court.
3. Attorney Debt Collection Letter. Some debtors are really intimidated by letters from attorneys. Maybe it's the letterhead? Maybe it's because it shows how serious you are about the matter? Some attorneys will charge a nominal fee to write a threatening collection letter on your behalf. The price could range anywhere from $50 to $350. If you have a pre-existing relationship with an attorney, she may give you a better deal. Note: some debtors get nasty letters from attorneys all the time so they are not particularly moved by them. Thus, attorney-drafted collection letters don't work every time, but they do work sometimes. When they do, it's a great deal for you because it means you didn't have to pay commissions, just a one-time fee!
4. Have your attorney file a lawsuit. If the debtor doesn't respond to a collection letter from you or your attorney, you can hire an attorney to sue the debtor for you. Sometimes, unfortunately, the only way to get paid is to start a lawsuit. This is a last resort because it is expensive and uncertain. It's only worth it if you are owed a large amount, the debtor has the actual ability to pay (you can't bleed a turnip!), and you have good substantiating evidence of the debt (a promissory note would be ideal). It's also much more attractive if your contract with the debtor allows you to get attorneys fees and costs in the event of a dispute. That way, you can ask the debtor to pay your attorneys fees as well. Take a look at your contract because if it allows you to collect attorneys fees and costs, then a lawsuit is a much more attractive option. Lastly, be sure and hire an attorney who works in the state (preferably the county) where the debtor resides. Generally, you have to sue the debtor where he or she lives. Thus, you need an attorney who is licensed to practice law in that state and comfortable in those courts.
One final note about using a collection agency versus an attorney: a lot of people like collection agencies because they require minimal payment up front; you only pay omission if they collect. On the other hand, attorneys require you to pay a retainer up front.
There's no exactly right or wrong way to go about this, so just do a little research about what commission (and fees!) a collection agency would charge you, and whether your contract allows you to recover attorneys fees. You can also switch tactics. Sometimes clients would ask me to sue the debtor after a collection agency was unsuccessful collecting the money.
I'm going to end on an important piece of advice: Sometimes it's better to just let go. Never forget that we're emotional beings and often get carried away by them. Don't let your feelings of anger, guilt, and revenge drive you to pursue a debt beyond what is permitted by debtor's laws or just good financial sense. Learning to let go is also an important skill that needs to be developed over time.
I hope this post helped broaden your collections horizons and made you aware of some important collections issues. Please let me know if you have follow-up questions or concerns.
Respectfully,
Sarah
Sometimes it's better to just let go.
This is probably the truest advice that most people forget. Dont be a cut throat - have a conversation with the business - can they really not afford to pay?
Can they work on a differed payment at all?
I have in the past let go of 2 small businesses who despite increasing their sales just didnt manage the finances better. Had a chat with them and tried to figure out what we could do. Turned out that they were just under breaking even - so I offered to get a friend look at their accounts.
What came out was that they were paying too much for many services, tied in with ridiculous contracts. in the end they closed down the bsuiness and restarted, but after seeking business advice first. 2 years down the line, the first business is still running, and has been one of my best referrers for work (even though many times I have to pass it on to third parties).
But thats what I always say - your relationship is with the people that run the business, not the business itself.
Sarah
Your contributions to SEOmoz are greatly appreciated, since most SEOs have limited experience with overall business practices, and even less with legal matters.
As someone with 25 years overall business management experience, and in this post's case, someone who previously worked in debt collections before i moved into the management arena, I would offer a couple additional points however.
1. It really begins with the written contract proposal and subsequent contract. The more clearly defined the proposal, the less the client can ask for work to be performed that was not previously discussed that you then need to perform without an additional fee. This is the single biggest failure of most people in the consulting arena. Once I was brought in to manage a project that was a year behind schedule and $100,000 over budget. I was the fifth project manager brought in.
The first thing I asked to see was the original proposal and contract. It turned out to be the most vague and overly simplified one page document I had ever seen. So essentially the client could have asked for the moon and not paid for it if he had chosen. (The client was a lawyer so I was blown away by this...)
SO - The contract needs to specify exactly what the payment terms are for the project, and how things will be handled if requests are made that go beyond the scope of the contract. Since I began this practice, I have never had more than an initial hassle with client payments.
2. If the client fails to pay a specified payment (as detailed in the payment terms of the contract) it is vital that the consultant take immediate action. Waiting around and hoping this will resolve itself is a big mistake. Showing any sign of weakness signals to even semi-unscrupulous business owners essentially tells them they can walk all over you.
3. If you say you are going to seek legal action, you must in fact follow through.
Sarah - the FTC summary you link to is a summation of the Federal Fair Debt Collection Practices Act - a legal document that I had to learn like the back of my hand when I was in collections, and a must read for anyone who may need to collect debts.
However this is a Consumer protection act, not a Business debt reference. Do you know which federal regulation or law that is similar to the Act but that specifically applies to business?
Thank you, Sarah, for a very timely topic! Esp. important to remember is that we're dealing with people who are emotional beings just like us. Often a simple phone call can clear things up and save you head- and heartaches.
This is very timely. I've seen a number of posts and articles address the impact of recession on ad budgets...more specifically, a recent post by Rand discussed that topic from an SEO perspective.
While I believe there is opportunity for businesses to gain market share when competitors reduce their ad spend, the issue of collections as posted in this thread, presents a different challenge.
I wonder, are other agencies/consultants out there seeing an increase in the number of aging accounts receivable in the current market?
I am a big proponent of getting large deposits and payments in advance. If you have developed good rapport, this should not be an issue (at least getting a deposit).
Secondly, one technique I have used in collections (not in the SEO business), was to draft a letter showing a CC to my lawyer, but not actually send it to the lawyer so as to not incur any legal costs. This has worked very well for me.
I'm with you OldSchool. My rule is that for any project valued at less than $750 I get 100% up front, more than $750 and less than $7500 I get 50% up front and the remainder due upon completion of the largest milestone. For larger budgets I will sometimes split them out into three or at most four payments, with the single largest payment being the deposit, and each subsequent payment being less than the previous.
Anyone who balks at my payment scheduling is sending me a red flag that they are someone I probably don't want to do business with, either because they are in financial trouble or they may become a payment problem. And I am not hesitent to walk away at that point.
Compromising fees (beyond a small reasonable amount) or payment terms is based on fear and especially in this economy the more I trust that my terms, subsequent service and methods are top-shelf, the more confident I am that there is enough business in the universe that I can walk away when I see any of those red flags.
As an Seo.
If you have a legitimate problem with someone not paying their bill.
Have exhausted all nice letters, phone calls, etc.. and they are just dodging you.
then report it to the BBB, then rank the PUBLIC BBB complaint first for their company name and business owners name. (they did hire you to do SEO)
Do NOT blog about it, comment about it, just use the BBB info to tell the story.
Print out Google results for both and fax them the Google page and ask them if they would like to submit to arbitration with the BBB.
The BBB will almost always rule in your favor if you did have a CONTRACT and the client just declined to pay.
Also most of the work for SEO is front loaded, KW research, site modifications, etc.. so bill a larger fee jup front then swtich to maintanance of a retainer type of billing after the bulk of your work.
Thanks Sarah,
A very useful article, but one which I hope I never have to refer to,
I work internally (soon to be externally) so I would be interested in know what percentage of clients or how often you would have to resort to this?
Also, I think a related article on "tell-tale signs that a client cant afford you" would be a great related article.
Hi Sarah,
I have a (somewhat general yet specific) question for you. If a consultant/contractor - call them what they will - were to secure a personal guarantee from a client located in the US (let's assume they're both US based for the sake of this question), would the client be able to use the FDCPA (Fair Debt Collection Practices Act) as a legal defense against collection activity should they default on a company debt and someone acts on the behalf of the creditor tries to collect from them personally through the personal guarantee?
I'm fairly certain - about 85% here (I've dealt with the FDCPA before - twice as a plaintiff) - that they'd be up the proverbial creek without a paddle since the debt was not originally of a "personal, family or household nature", but given the changes the collections industry (and those who oppose them) have been fighting to push through Congress and the various state legislatures, would a debtor be able to use this as a "stalling tactic" (or even a quick $1,000* in statutory damages plus recovery of legal fees) against a collection agency or other agent - such as an attorney - acting as a debt collector?
Since the hypothetical debt (in my question) was originally a business expense, I'm pretty sure that the FDCPA would not apply; however I wouldn't put it past a sleazy individual to try and use it as a legal obstacle. I just thought I'd ask for your own insight on the matter.
-- Dan
* = yes, I know it's a maximum of $1,000, and that the judge or magistrate judge can award a plaintiff a lesser amount should it deem it appropriate to do so
I think you'll be hard pressed to land any deals in which the business owner has to make a personal guarantee of any kind. Some of the owners I've run into are even squeamish to sign a deal on behalf of their company. To put the onus straight on the owner can very likely scare them into silence.
The safest best is to just do your due diligence from the beginning -- check them in Google, BBB, credit history if necessary, corporation commission, referrals, etc -- and take the risk.
I'm wary of the BBB - it's a membership/fee-based org so its impartiality can always be questioned.
My own experience with a local BBB in the Seattle area wasn't the least bit pleasant. Their membership acquisition tactics were abysmal (nor did they seem concerned over a possible telemarketing scam using their name).
I suggest giving the same weight to the BBB as you would any membership-base trade organization (i.e. length of membership or level of participation).
Very timely article. Having gone through the internet boom and bust 1.0 I did time as a bill collector. I felt like Bruno who was going to break your legs if you didn't pay. I used the cc to the attorney letter without the actual cc along with regular repeated phone calls and emails. Since many of my clients were start ups going down I settled for what I could get. Sarah's point about trying to get a personal promissory is an excellent suggestion that I could have used. I remember feeling good about a settlement I had reached for a portion of the amount due until the former client pulled up in an expensive SUV.
Now I am using the credit card upfront approach with larger projects broken into stages requiring monthly payments. If the credit card does not go through we have a lot of leverage and it is clearly spelled out in advance what will happen. We are seeing more and more issues with credit card payments - another sign of these tough economic conditions.
I've written off past due bills in the past... I just couldn't justify more time spend trying to hunt them down and paying more fees and the aggravation. As a result I've developed better billing systems, more upfront deposits and chuck-off the loss to lesson learned. Now granted we were talking a couple hundred dollars, not thousands...
I've stayed away from collecting agencies since I find it to be a pretty dramatic way to end a working relationship. Guess I just didn't have the heart to put my foot down.
I should really implement the automatic credit card charge and use advance payments to avoid any problems with new clients.
Recently we have been checking the liquidity of companies before commencing with an SEO engagement. This helps us to establish if the company has funds available on a regular basis to pay bills. We perform this check before the pitch phase.
With the state of the economy in the UK, it is very important if not vital to check before all your SEO efforts are wasted.
Otherwise, I like to charge clients on a monthly basis for work. This allows me to keep on-top of payments and gives me piece of mind the clients has no problem paying their bills.
I also keep note of all logins throughout the course of the SEO campaign, this includes webmasters, tracking and reporting.
Should a client refuse to pay, or is unable to pay the bill, although you can't in theory switch OFF the SEO efforts you have applied to a website, you can at the very least apply restrictions.
Touch wood this has not been the case with any clients, but should it happend, I suppose you will only be a month out of pocket.
:-) Sesaons greetings
I actually just redid my contract -- it is now 7 pages long.
Sarah, I'd be curious to hear your thoughts on two things I added to this one: (1). A Force Majeure clause and (2). A provision for all disputes to be settled by arbitration.
Are these things you recommend having in a contract?
My personal experience has been this:
1. Collection agencies are a waste of time. They don't have any teeth but at least you can put a smear on the company's credit record.
2. Small claims court is a waste of time also. Even if you win, the company can close their bank account and you can't get their assets. I'm talking about Canada so I don't know how it is in the US.
3. Unless you are owed a lot of money, going to an attorney will cost you a lot more than you were ever owed. Justice isn't really blind. It's broke.
The truth is that if a company is going to rip you off, they'll do it anyway because that's what they do and they're good at it. If they run into financial problems it's not such a huge issue if you're doing well. If not, their problems become your problems and I really hate that personally.
The best course of action is to take a deposit. Not even a credit card because that can always get rejected or they can dispute the charges. A solid deposit shows commitment on the client's part and you have partial protection. I never used to take one in the past but for small companies it's a hard and fast rule now. Not getting paid because someone doesn't know how to run their business or because they're unscrupulous gets tired really quickly.
Finally, the best advice given so far is that sometimes you just have to let go. You really do. Move on and better things will come to you. It's very easy for one of the deadbeats to pull you down with them so just let go lest you be dragged to their sorry level.
Right on NickNick. They also steal your energy through your anger and frustration to the point you're not focused on your business. And that's perhaps the biggest ripoff.
I never start a project without retaining a credit card... I learned 12 yrs ago that I was NOT going to be a bill collector. Haven't had a problem with it - ever.
Nice post. I've definitely had problems with this in the past.
Do you have any advice for dealing with different countries? I've had problems collecting payments from several European affiliates. My strategy has been consistent nagging (which paid off) but I'd like to know what type of recourse can take if I need to.
I've recently fallen for what I believe was going to be 100% legitimate I had a friend refer them who I do not blame I don't believe that they knew this would happen. I spent the better half of 4 months I'm talking about minimum 6 hours a day advising and coordinating teaching this person how to turn their current website which was may be, and I'm being honest here a bad looking website for 1998. I told the gentleman I did not do web development however I know people who do I will get them involved you wish to continue?
When I told him the price of a WordPress site for a 250 page e-commerce
The site would cost north of $5000 if you want it done right minimum.
The gentleman reacted as if we had just told World War III was starting. This is why I know it is my fault right then and there I should've said bye to him.
Stupidly I explained the cost of what he wants and how he wants it done are X and you need to pay it if you have a method of building this on your own please be my guest I do not want to be involved with web design anyway. I said it much nicer than that.
I've got a call from him apologizing stating he had checked pricing which is kind of insulting and that he feels he can: a favor from a friend that knows what they're doing. I said listen you want me to be able to get this site to rank if this person that you are bringing in is not on the same page or does not implement the things I tell him to implement I want nothing to do with it. I was assured this person was the best thing since sliced bread and stupidly went along with it. Unfortunately that person knew nothing about what they were doing however what they did to was waste a month of my time and get this person who knew some PHP dangerous enough to think he can build his very own template not use one build it.
At this point I had done maybe 10% SEO the rest putting out fires I explained to him I would have to leave if he tried to reinvent the wheel I would stay and bring on by people at the price that we agreed on or I would possibly not be able to work with him and him and hinted to the amount of money I was owed. Right then and there he starts to agree telling me to go get my people and why did he think that he could do something that he has never done.
I felt like while we have just made a breakthrough that could, wrong way were on the right track.
The person I had for web design did a very good job, in fact I was so impressed I was honestly jealous of the site in some ways. The bad news was the client who I had control over if he could have access to the site via FTP or WordPress I even had control of this e-mail. Would start changing things on the website while it's being built so we would spend hours coding and wake up the next morning find out it's all gone. The host used was a managed WordPress host with a stellar reputation I did not and I take pride in not recommending poor products or shoddy services regardless the gentleman Entering the site. We told him if he changed our work one more time the price was going to double. He tried to explain that he was not hurting anything that we did a but that " he wanted to learn WordPress together"
I stated no I can teach you how WordPress works of course we are not at the point where we have a functioning site. You need to stop playing with code that you do not understand. I was mad to say the least the developer was on the verge of leaving.
I'm going to cut this short order ended up happening was he tried to pay the developer only half because I hired him I promptly paid him out of my pocket and demanded money to compensate immediately or I would destroy the website without thought. This was when I was getting very ugly.
The gentleman tried to call the hosting provider asking them to please release his websites thank goodness the post did as expected and contacted me asking if I can release these websites to person X my answer was no absolutely not never until I tell you he has paid me I would like you to cover the sites so he will not think that they even are where they are and try to pull them.
At that point the client told me a sob story then told me how interested in helping me get the money he owes me he is and that that's what counts nothing else. I told him your site can stay up however you must make a payment of some sort immediately or the website will no longer function.
I forgot to state he was getting orders like crazy I set up gravity forms and frankly I was the webmaster I saw every order for products north of $50,000 we had turned his site from an eyesore that did not have a way to even allow someone to order into a very modern clean fast safe and effective website.
I explained to him I knew that he was getting paid and frankly I'm not okay with that if I am the one being left without pay. At that point he stated he would pay me in full for some job that he had done because of the website. I was happy that it was all going to be over I charge a minimum of $15,000 a month sometimes I'm flexible on that very rarely. This man has retrieved his ROI already and spent 88 check for $500 with something the banker told me meant that I was to be paid in full if I cashed it they advised me to cross out the memo and initial it. I did so and sent an e-mail with a copy of what I had done and asked did you mean to say you were going to give me $500 when you only almost $100,000? The answer was yes I have paid you when I said you know the amount of time you know the agreement you know I did not fail you he stated to me that he wishes he could we could be friends in the future but he wants his "website" has he needs to make adjustments to allow him to take credit cards something he had an issue with in the past some fraud that he asked me to look into the best system when I told them my results he never implemented the system it seemed odd to me.
I went and spoke with my attorney got a piece of paper from him had it faxed out to the person to sign in order to allow him use of the website to install the payment gateway to pay me within 7 days.
In hindsight that was the dumbest thing I've ever done in my life. (I had forced him to start paying his own hosting fees after 3 months of perceiving nothing however kept the account in my name) The person promptly installed plug-in to backup their website to Google drive did so then actually called his record company stating that the hosting company who had been nothing but fantastic to this person as well as myself. Had defrauded him and he had to charge back the fees for web hosting. This obviously hurt the hosting provider I felt terribly and paid for his destruction but there's really no way I can make up for what he did because of credit laws so I sided with the hosting company and did the right thing by turning over all e-mails were he explains that he's just going to stop paying and "the minute you locked me out I was when I decided to to a different host I did not want you having control over my website" he went on to say that he could not pay me with the money from credit card sales because there were no credit card sales." I had not become eligible to work with a merchant services account that's why I had so much time to work on this project" meaning mess of the project he had hired me to do signed his name and agreed to a fee. I told him that I would see him in court. He explained to me he had no money. I know longer care or believe them so I know he has a business I know I'm in the right chest feels worse having to gamble on attorneys' fees tens of thousands of dollars to make this guy pay me. Apparently I will be ruining his children's lives in addition to them having to drop out of college if I see him He will lose house according to him.
One of the most interesting things that occurred were the guy thought web hosting was easy & big-money so he and his brother started a reseller of the blue host hosting company that does not have one inbound link pointing at it literally. So in addition to not knowing jack about hosting the guy thinks it is okay to spend money on building a site for that, but not pay me.
I will let you all know how it turns out, but this is truly the worst thing know I could've ever imagined happening that they signed the contract.
Words fail me for the way I want to behave however I know I cannot do that and I will not do that. I simply have to work on trusting people much more after this as I have been lucky and never had anything like this happened to me prior. Images honestly hard for me to even listen to his most likely lies about me ruining his life if I take him to court when I am taking him to court and if that's what happens that's what he gets. I hope this is of some value to some of you people. I did not want to be just a long rant
I believe the reason the gentleman thought I could just be brushed off and not care was that I own manufacturing companies as well and to okay in that field so I do not need what he owes however to be honest some part of me does need it to feel less angry.
The only thing I've done to this guy in spite and this I would like to know how bad this is he actually have the gall to tell me to put him as the admin on the Facebook page I had created for him and please take my name off of it.
I responded with I am not touching a keyboard to help you until I am paid. I then locked the site up including removing the business name according to Facebook if I The business name on their I could be held liable for trademark infringement. Though I doubt he has a trademark.
I hope you guys learn no matter how hard you work for them there is a chance somebody not going to do the right thing on their end. Even if they give the impression of doing the right thing if they are not going to actually do it is most likely just desperation on their end.
The thing that makes me the most upset is that this man knew from the beginning he had no intention of paying because of the statement saying " I only had time to do this project because I could not sell things with a credit card" it was something to that effect but what it meant was he had me run a fools errand in addition to hurting the credit of a posting company which I have a lot of respect for.
I believe the information I have given the host was enough to show that this man made up the reason for the a chargeback. In fact, I will check on that now.
If anyone's still reading this do you feel it is fair to ask for $25,000 in extra fees because of the amount of hours I've spent dealing with his mess? The best feeling of all this was checking the web speed of the site dropping from an average of 1 second and always under 2 to an average of 7 1/2 the best I've seen is 6 seconds with his new choice to become his own web host God help the person who signs up for with him
As he went from exactly what he needed to the bottom of the barrel on his own choice.
Sincerely,
Thomas
Thank you for this nicely organized and thorough post about collecting past due amounts.What do you think about alternative payment? Is there any time when a business should accept it?For example, when this is possible...Business A is can't afford to make the payments to Business B. As a result, Business B, instead of seeking collections or legal action, sets up a new contract in which Business A provides Business B services for free for X period of time.Admittedly, this alternative method would not work for every situation. Yet, I can see it happening if both parties are willing and Business A keeps up his/her end of the new deal. For example, a publisher owes a writer money and experiencing delays with funds that could take a month or more to resolve. The writer agrees to accept publishing or promotional services from the publisher during the delay period and agrees to knock off some of the original amount in exchange.
Great article. When worst comes to worst though you need to place the account with a collection agency that is diplomatic like https://www.tuckeralbin.com
nice blog, i agree in this current market this can be the only way to deal with companies. I recently started a campaign, and the client agreed and said where do i sign, I did not get the campaign live until they cheque had cleared. I was very clear with the client at the start of the campaign that it will be paid a month in advance, and they accepted this.
I think the action of sending the outstanding amount to the debt collector is the best option as most business will ignore a letter from a lawyer as they may understand that you cant afford the time to fight them in court, but a debt collector leaves a nasty mark. Always leave this as a last resort, because it can ruin future deals if everytime a client is 1 day late you sent them to the cleaners or swimming with the fishes...
Another idea is when you start the campaign, setup a payment schedule, so they understand you arent being greedy by invoicing them for this month when the month hasnt ended. This can stop a whole lot of arguments as you can simple request they review the payment schedule that they signed off...
great blog. a follow up one with resources on ways to write a good contract would also be helpful. thanks sarah
Good Article.
Thanks for the post.
We had a situation like this only couple of times. Both times sending them mail with an idea to make it public (that they defaulted) worked like a charm.
Reputation Management at its best or worst I guess!
Thanks Sarah,
Great Tips on Collecting Past Due Payments From Clients.
I never use these techniques before collecting payments from clients. I just sent them written letter on company's letter pad. And I got the payments.
I will consider all these points in future when I need it.
Hmmm . . . what great tasty commentary for the avvoblog. . . .
-Conrad